The Car and Truck Fleet and Leasing Management Magazine

Maintenance Costs Increase in 2011-CY

TORRANCE, CA ­­- Many fleets are incurring additional miles on vehicles due to increased business activity, which has added to fleets' costs with increased repairs and replacement cycling.

Complicating maintenance in 2011 was a shortage in the availability of parts following March's earthquake and tsunami in Japan. This resulted in many repair delays.

The good news is that, because of increased vehicle quality, there are fewer repairs needed. The bad news: these repairs tend to be more expensive. In addition, automakers' proprietary systems require independent vendors to source the parts from the OEMs more frequently than in the past. This is on top of the additional requirements for specific oils and fluids, which also have raised costs. On average, fleets with 2010- and 2011-MY vehicles have experienced more required OEM-scheduled maintenance services. Costs increased 10 percent or more in 2011 for fleets that continued to extend their replacement parameters due to capital expenditure constraints. However, it isn't just the cost of parts that have increased. Labor rates have also been rising.

The biggest replacement part cost has been for tires, however so-called "soft" expenses, such as driver downtime, are also an issue. Because of downtime, fleets are seeing an increase in rental vehicle expenses. The increased vehicle repair downtime is due, in part, to the fact that many repair shops don't stock a large inventory of parts. Instead, they order only parts they require on a daily basis.

New technologies have also driven maintenance costs, particularly when things go wrong. For instance, the integration of multiple systems and higher emphasis on hybrid, electric, and alternative-fuel vehicles have led to the need for technicians with a higher degree of training-which, in turn, leads to higher costs. Fleets need to carefully evaluate the cost-benefits of alternative-fuel vehicles in the context of the increased maintenance costs, particularly for fleets with longer lifecycles - over 125,000 miles. The silver lining is that, although hybrids incur additional costs, they also contribute to maintenance reductions in other areas. For instance, early results suggest that the hybrids with regenerative braking systems have fewer and lower cost brake repairs.

One way some fleets are realizing savings is by shortening the vehicle replacement cycle. This has been a result of the strong resale market. This has led to decreased maintenance spend due to less frequent major repairs and more repairs covered under warranty.